Could San Diego Home Prices Be Facing A Double Dip?

Just like the absolute bottom of a pendulum's swing can pass in a blur so too can the bottom of the real estate market.

Could San Diego home prices fall further still? After reading some data this afternoon it seems there’s the potential of a double dip in the San Diego real estate market. What does this mean? It means that after an increase of about 11% in home prices, prices could be heading in the opposite direction. How much you ask? By some estimates we’re looking at a potential decrease of about 8.6 percent. This would negate all but about 3% of the recent gains in the San Diego real estate market.

This is attributed to buyers no longer having any incentive to purchase a home since all tax credit programs have expired. Though prices are still low the anticipation of a slight price fall might keep buyers on the fence longer. Thought this might be a good thing for buyers that waited to buy there’s something else buyers will have to contend with.

Buyers that waited now have to contend with potentially higher mortgage rates. For the first time in a very long time we saw an increase in 30yr fixed mortgage rates. higher rates is something no one, including the Fed, because this will make home buying more expensive thus resulting in less sales prolonging the real estate market recovery.

The reality is that no one can predict the future. There’s so many factors that affect the real estate market an d we can do is track these factors and make the most educated prediction as possible. The reality is that were looking at the bottom of the market right now. Unlike the swing of a pendulum real estate is changing constantly and doesn’t have an absolute bottom point you can see. As we’ve all heard at one point or another when you’re at the bottom there’s only one way you can go. Anyone want to guess which way that is?